Apyx Medical Corporation (NASDAQ:APYX) Q2 2020 Results Earnings Conference Call August 10, 2020 8:00 AM ET Company Participants Charlie Goodwin - President and Chief Executive Officer Tara Semb - Chief Financial Officer Conference Call Participants Matt Hewitt - Craig-Hallum Matthew O'Brien - Piper Jaffray Dave Turkaly - JMP Securities Kyle Bauser - Colliers Securities Russell Cleveland - Renn Capital Operator Good morning, ladies and gentlemen, and welcome to the Second Quarter Fiscal-Year 2020 Earnings Co ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading symbol(s) Name of each exchange on which registered Common Stock APYX Nasdaq Stock Market, LLC Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting company ☒ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES E ...

Financial Data and Key Metrics Changes - Total revenue for Q1 2020 was $5 million, an 11% decline year over year, at the low end of the guidance range provided [6][7] - Net loss for Q1 2020 was $2 million or $0.06 per diluted share, significantly lower than the net loss of $5.6 million or $0.17 per diluted share in Q1 2019 [35][36] - Cash and cash equivalents as of March 31, 2020, were $51.4 million, down from $58.8 million as of December 31, 2019 [37] Business Line Data and Key Metrics Changes - U.S. sales declined 7% year over year to $3.6 million, while international sales declined 20% year over year to $1.4 million [9] - Advanced Energy business sales declined 9% year over year to $4 million, and OEM business sales declined 20% year over year to $1 million [9][10] - Advanced Energy sales in March declined nearly 50% year over year, with U.S. cosmetic surgery customer sales down nearly 30% year over year [13] Market Data and Key Metrics Changes - The COVID-19 pandemic caused significant disruptions, leading to a sharp decline in procedural trends, particularly in the U.S. and international markets [12][13] - The company experienced a 90% year-over-year decline in sales during April 2020, with a slight recovery noted in the second half of the month [42] Company Strategy and Development Direction - The company is focused on four strategic initiatives to drive long-term growth in the cosmetic surgery market, including pursuing new clinical indications for Renuvion technology [19][30] - Despite the pandemic, the company plans to continue investing in key areas that support future growth, such as clinical studies and manufacturing efficiencies [17][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ongoing challenges posed by COVID-19 but expressed confidence in the company's ability to recover and return to strong growth [24][30] - The company is well-capitalized with over $51 million in cash, allowing it to fund operations for multiple years [25] Other Important Information - The company will not provide full-year 2020 financial guidance due to uncertainties related to the pandemic [37] - The company has implemented cost-reduction measures, including delaying discretionary spending and eliminating bonus accruals [17][36] Q&A Session Summary Question: Has there been heightened demand from Renuvion users as practices reopen? - Management noted that there has been a slight pickup in handpiece demand in late April, with overall sales down 90% year over year for the month [42] Question: How are lean initiatives impacting manufacturing? - Management confirmed that manufacturing efficiencies have improved product margins in the Advanced Energy segment, and they continue to focus on these initiatives [44][45] Question: How did virtual event attendance compare to in-person events? - Virtual events saw significantly higher attendance, with one recent event attracting 123 participants, much larger than typical in-person events [49] Question: How has COVID-19 impacted international device approvals? - Management indicated that there have been no significant issues with device registrations in other countries, and they remain confident in meeting proposed timelines [51] Question: What percentage of customer offices are currently open? - Management stated that it is difficult to quantify the percentage of open offices due to varying state restrictions, but they are encouraged by the lifting of restrictions [54][55] Question: What is the timeline for resuming clinical trials? - Management could not provide a specific timeline for resuming clinical trials, as it depends on clinicians reopening their practices [58]

Financial Performance - Total revenue decreased by 11.2% or approximately $0.6 million for the three months ended March 31, 2020, compared to the same period in 2019[67]. - Advanced Energy segment sales decreased by 8.8% or approximately $0.4 million for the three months ended March 31, 2020, compared to the same period in 2019[67]. - Gross profit for the three months ended March 31, 2020, decreased by 16.3% year-over-year to $2.98 million, with a gross margin of 59.7% compared to 63.3% in 2019[75]. - The company incurred a net loss of $(7.5) million for the first quarter of 2020, which was primarily funded by cash used in operating activities[86]. - For the three months ended March 31, 2020, the company reported a net cash used in operating activities of approximately $7.4 million, compared to $5.1 million in the same period for 2019, reflecting an increase in operating loss[86]. - The company's working capital decreased to approximately $63.6 million as of March 31, 2020, from $64.4 million at December 31, 2019, primarily due to the net loss incurred during the first quarter[85]. Expenses - Research and development expenses increased by 34.2% for the three months ended March 31, 2020, primarily due to spending on two IDE clinical studies[77]. - Selling, general and administrative expenses increased by approximately 28.4% for the three months ended March 31, 2020, primarily due to higher bad debt expense of $0.6 million[81]. - Interest income decreased by 48.9% for the three months ended March 31, 2020, compared to the prior year, due to a lower average balance and yield on investments[83]. International Sales - International sales represented approximately 27.6% of total revenues for the three months ended March 31, 2020, down from 30.5% in the prior year[68]. - International sales are coordinated by sales and marketing personnel at the Clearwater, Florida facility, with products sold in more than 45 countries[68]. COVID-19 Impact - The company expects decreased demand to continue into the second quarter of 2020 and possibly beyond due to the impact of the COVID-19 pandemic[74]. - The company has implemented hiring restrictions and reduced discretionary spending in response to the COVID-19 pandemic[65]. - The company is actively working with customers to collect receivables amid multiple requests for extensions due to the impact of the COVID-19 pandemic[87]. - The company expects that utilizing the net operating loss carryback provisions will significantly help mitigate the working capital impact of the COVID-19 pandemic on sales and operations[86]. Tax and Financial Obligations - The effective tax rate for the three months ended March 31, 2020, was 71.5%, significantly higher than (0.1)% for the same period in 2019, primarily due to the release of a valuation allowance on net operating loss carryforwards[84]. - The company recognized an income tax benefit of approximately $4.9 million in Q1 2020, with an expected tax refund of approximately $3.7 million by the end of 2020[86]. - The CARES Act allows the company to defer payroll tax payments incurred between March 27, 2020, and December 31, 2020, with an expected deferral of between $0.4 million and $0.5 million[87]. - The company has purchase commitments totaling approximately $0.7 million, expected to be fulfilled within the next six months[89]. Legal Matters - The company has accrued $1,000,000 for defense costs related to legal claims, with $820,000 still accrued as of March 31, 2020[122]. - The company is involved in various legal actions concerning its Helium Plasma technology, which may have a material adverse impact on its financial condition if damages exceed insurance coverage limits[119]. - The company intends to vigorously defend against allegations in a class action lawsuit related to public statements about its JPlasma® technology[121]. - The company believes that the allegations in the Amended Complaint are without merit and that claims are adequately covered by insurance[122]. Internal Controls - The company has identified material weaknesses in internal control over financial reporting as of December 31, 2019, and is in the process of remediation[112]. - Management has identified three material weaknesses in internal control over financial reporting as of December 31, 2019, including the need for additional qualified accounting personnel[109]. - The company has taken steps to remediate material weaknesses by hiring a new Chief Financial Officer and a Corporate Controller with relevant experience[114]. - The company continues to monitor the effectiveness of its internal controls over financial reporting on an ongoing basis[115]. - There were no changes in internal control over financial reporting that materially affected the company during the three months ended March 31, 2020[116]. - The company accrues a liability in its consolidated financial statements for known or probable losses that can be reasonably estimated[123]. - If the estimated loss is a range, the minimum amount of the range is recorded when no amount within the range is a better estimate[123]. - Significant judgment is required to estimate the amount and timing of a loss to be recorded, indicating potential variability in actual results[123].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each Class Trading Symbol Name of each Exchange on which registered Common Stock, $.001 Par Value APYX NASDAQ Stock Market LLC FORM 10-K ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number: ...

Apyx Medical Corporation (NASDAQ:APYX) Q4 2019 Earnings Conference Call March 16, 2020 5:00 PM ET Company Participants Charles Goodwin - President and Chief Executive Officer Tara Semb - Chief Financial Officer Conference Call Participants Matthew Hewitt - Craig-Hallum Capital Group LLC Matthew O’Brien - Piper Jaffray & Co. David Ciruli - JMP Securities Kyle Bauser - Dougherty & Company LLC Operator Good afternoon, ladies and gentlemen, and welcome to the Fourth Quarter and Fiscal Year 2019 Earnings Confere ...

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company's financials show increased sales but a larger net loss due to higher operating expenses - The company corrected **immaterial errors** in prior period statements related to stock-based compensation and OEM revenue recognition[17](index=17&type=chunk)[18](index=18&type=chunk)[20](index=20&type=chunk) [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $62,272 | $16,466 | | Total current assets | $78,905 | $89,517 | | Total assets | $86,943 | $95,610 | | **Liabilities & Equity** | | | | Total current liabilities | $9,039 | $7,585 | | Total liabilities | $10,210 | $7,725 | | Total stockholders' equity | $76,733 | $87,885 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Q3 2019 | Q3 2018 | Nine Months 2019 | Nine Months 2018 | | :--- | :--- | :--- | :--- | :--- | | Sales | $7,575 | $3,672 | $19,772 | $10,760 | | Gross Profit | $5,017 | $2,521 | $13,015 | $7,270 | | Loss from operations | $(4,697) | $(2,796) | $(14,935) | $(8,449) | | Net (Loss) Income | $(4,311) | $69,174 | $(13,900) | $67,967 | | Basic & Diluted EPS (Continuing Ops) | $(0.13) | $(0.01) | $(0.41) | $(0.19) | [Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) - Total stockholders' equity decreased from **$87.9 million** to **$76.7 million**, driven by a **net loss of $13.9 million** for the nine-month period[8](index=8&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | Net cash used in operating activities | $(15,094) | $(2,835) | | Net cash provided by investing activities | $60,766 | $35,459 | | Net cash provided by (used in) financing activities | $152 | $(2,629) | | **Net change in cash** | **$45,806** | **$29,995** | | **Cash at end of period** | **$62,272** | **$40,663** | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) - The company divested its **"Core" business segment** for **$97 million** to focus on its J-Plasma® technology[13](index=13&type=chunk) - Adoption of the new lease accounting standard (**Topic 842**) resulted in recognizing **$212,000** of operating lease liabilities and right-of-use assets[30](index=30&type=chunk) - The company is involved in legal actions related to its **J-Plasma® technology** and has accrued **$500,000** for class-action defense costs[44](index=44&type=chunk)[47](index=47&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue growth is driven by Renuvion® commercialization, though margins declined and expenses rose [Executive Level Overview](index=26&type=section&id=Executive%20Level%20Overview) - The company is focused on the full-scale commercialization of **Renuvion®** in the cosmetic surgery market[78](index=78&type=chunk) - **International sales grew to 26.7%** of total revenue in Q3 2019, up from 24.8% in Q3 2018[79](index=79&type=chunk) - The company initiated an **IDE clinical study** for skin laxity and received **510(k) clearance** for the Apyx Plasma/RF Handpiece[80](index=80&type=chunk)[81](index=81&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Revenue by Segment (in thousands) | Segment | Q3 2019 | Q3 2018 | % Change | Nine Months 2019 | Nine Months 2018 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Advanced Energy | $6,094 | $2,985 | 104.2% | $15,734 | $8,727 | 80.3% | | OEM | $1,481 | $687 | 115.6% | $4,038 | $2,033 | 98.6% | | **Total** | **$7,575** | **$3,672** | **106.3%** | **$19,772** | **$10,760** | **83.8%** | - **Gross margin decreased to 66.2%** in Q3 2019 from 68.7% in Q3 2018, driven by product mix and international sales[91](index=91&type=chunk) Operating Expense Changes (Q3 2019 vs Q3 2018) | Expense Category | Q3 2019 (in thousands) | Q3 2018 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Research & Development | $936 | $613 | 52.7% | | Professional services | $1,996 | $628 | 217.8% | | Salaries and related costs | $3,020 | $2,119 | 42.5% | | SG&A | $3,762 | $1,957 | 92.2% | [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) - **Working capital was approximately $69.9 million** at September 30, 2019, a decrease from $81.9 million at year-end 2018[106](index=106&type=chunk) - Net cash used in operating activities was **$15.1 million**, primarily funding the operating loss of $13.9 million[107](index=107&type=chunk) - The company had purchase commitments of approximately **$4.6 million** as of September 30, 2019[108](index=108&type=chunk) [Critical Accounting Estimates](index=32&type=section&id=Critical%20Accounting%20Estimates) - Management identifies several critical accounting estimates requiring significant judgment, including inventory reserves and litigation accruals[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk)[117](index=117&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company has indicated that this section is not applicable - Not applicable[123](index=123&type=chunk) [Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective due to material weaknesses, with remediation efforts underway - Management concluded that **disclosure controls and procedures were not effective** as of September 30, 2019[124](index=124&type=chunk) - The company has identified **three material weaknesses** in its control environment, control activities, and monitoring controls[130](index=130&type=chunk) - **Remediation efforts are underway**, including hiring new personnel and engaging a third-party specialist[133](index=133&type=chunk)[136](index=136&type=chunk) [Part II. Other Information](index=36&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company faces legal actions and a class-action lawsuit related to its J-Plasma® technology and disclosures - The company is involved in legal actions concerning the use of its **J-Plasma® technology**, which it believes are covered by insurance[140](index=140&type=chunk) - A **class-action complaint** was filed alleging violations of securities laws related to a 510(k) submission[141](index=141&type=chunk)[142](index=142&type=chunk) - The company believes the allegations are without merit but has accrued **$500,000 for initial defense costs**[143](index=143&type=chunk) [Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors were reported for the period - There have been **no material changes** to the Risk Factors described in the annual report on Form 10-K[145](index=145&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[146](index=146&type=chunk) [Defaults Upon Senior Securities](index=37&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[146](index=146&type=chunk) [Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not Applicable[147](index=147&type=chunk) [Other Information](index=38&type=section&id=Item%205.%20Other%20Information) The company reported no other information for the period - None[147](index=147&type=chunk) [Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including certifications and XBRL data files

Apyx Medical Corporation (NASDAQ:APYX) Q3 2019 Earnings Conference Call November 11, 2019 4:30 PM ET Company Participants Charlie Goodwin - President & Chief Executive Officer Tara Semb - Chief Financial Officer Conference Call Participants Lucas Baranowski - Craig-Hallum Capital Kyle Bauser - Dougherty Matthew O'Brien - Piper Jaffray Russell Cleveland - RENN Capital Operator Good afternoon, ladies and gentlemen, and welcome to the Third Quarter of Fiscal Year 2019 Earnings Conference Call for Apyx Medical ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2019 was reported at $6.6 million, representing a 78% increase year-over-year from $3.7 million [6][29] - Gross profit increased by approximately $1.9 million or 76% year-over-year to $4.5 million, with a gross margin of 68.1% compared to 68.7% last year [32] - Operating expenses rose by $3.5 million or 63% year-over-year to $8.9 million, primarily due to increases in salaries, professional services, and selling expenses [33] - Net loss from continuing operations for Q2 2019 was $4.3 million or $0.13 per diluted share, compared to a net loss of $2.9 million or $0.09 per diluted share in Q2 2018 [34] Business Line Data and Key Metrics Changes - Advanced Energy segment sales increased by $2.2 million or 69% year-over-year to $5.3 million, accounting for approximately 80% of total revenue [6][30] - OEM segment sales increased by $721,000 or 125% year-over-year to $1.3 million, driven by a manufacturing and supply agreement with Symmetry Surgical [8][30] Market Data and Key Metrics Changes - US sales increased by $1.6 million or 53% year-over-year to $4.5 million, with Advanced Energy sales growing by 33% and OEM sales by 147% [9][32] - International sales increased by $1.3 million or 177% year-over-year to $2 million, representing approximately 31% of total sales compared to 20% in Q2 2018 [10][32] Company Strategy and Development Direction - The company is focused on four strategic initiatives: formalizing regulatory strategy, securing clinical evidence for Renuvion technology, enhancing physician support, and improving manufacturing capabilities [11][12] - The company aims to penetrate existing markets and expand into new countries, particularly those with large cosmetic surgery markets [16][17] - Recent appointments to the regulatory team are expected to bolster the company's long-term regulatory strategy [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed satisfaction with the company's performance despite challenges faced early in Q2, highlighting strong execution in May and June [9][28] - The company raised its fiscal 2019 revenue guidance to a range of $26.5 million to $27.5 million, reflecting stronger-than-expected performance [35] - Management remains committed to achieving long-term profitability and believes current cash reserves are sufficient to support growth initiatives [57] Other Important Information - The company received FDA 510(k) clearance for a next-generation laparoscopic handpiece, which is expected to enhance its product offerings [26][27] - The company is focused on improving manufacturing efficiencies, which are anticipated to positively impact financial results [25][36] Q&A Session Summary Question: Update on the size of the sales team - The sales team consists of 29 direct sales reps and six independent agencies, totaling approximately 40 [42][43] Question: Anticipated R&D expense changes - The company plans to maintain total operating expenses at approximately $40 million to $41 million, with most expenses expected in the second half of the year [44][45] Question: Future gross margin expectations - Management anticipates expanding gross margins over the next 3 to 5 years, although specific targets were not provided [46][47] Question: Details on the skin laxity trial - The trial will involve 20 patients, and there is no anticipated overlap with the dermal resurfacing trial sites [49][50] Question: Market entry hurdles for larger cosmetic markets - The company is working through regulatory requirements for each market, which varies by country [61][62] Question: Long-term financial strategy - The company is committed to long-term profitability and believes current cash reserves are adequate for growth [57]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File Number: 0-12183 Energy Elevating Lives APYX MEDICAL CORPORATION (Exact name of registrant as specified in its charter) Delaware 11-2644611 ...